American oil production will peak within the next three years, and begin declining before the end of the decade, a new report from US federal authorities has warned.
Crude output in the USA will hit 9.5million barrels per day – the largest since 1970 – by 2016 thanks to advances in fracking and oil extraction methods.
But the Annual Energy Outlook report, prepared by the country’s Energy Information Administration, warns that after that peak the oil production rate will level out before going into decline in 2020.
“EIA’s updated reference case shows that advanced technologies for crude oil and natural gas production are continuing to increase domestic supply and reshape the US energy economy, as well as expand the potential for U.S. natural gas exports,” said the organisation’s administrator Adam Sieminski.
“Growing domestic hydrocarbon production is also reducing our net dependence on imported oil and benefiting the U.S. economy as natural-gas-intensive industries boost their output.”
Gas production in the US will continue to grow, however, with the shale boom having kickstarted a revolution in the US gas industry. The EIA predicts a 50% increase in production by 2040, hitting 37.6trillion cubic feet, with low gas prices helping it to overtake coal as the main provder of US electricity.
The full report, to be pubished next year, will also predict Brent crude prices will fall to $92 per barrel by 2017, but will start to increase steadily due to global demand, leading to a price of $141 per barrel by 2040.
Demand from the developing world – including China, India and Brazil – will accelerate oil consumption from last year’s 89million barrels of oil per day to 117million by 2040.
Recommended for you
